China has outlined a five-year plan meant to fast-track the development of its domestic downstream industries that use rare earths, the Ministry of Industry and Information Technology said on Wednesday.

Published in its website, the Ministry of Industry and Information Technology said the plan involved increasing efforts to improve rare earth functional materials, bolster endeavors meant to expand the implementations of new materials produced with rare earth, promote its application in high-end manufacturing, and increase product added-value.

The plan, which also outlines the advancement of China's new material industry, lists down the expansion of six types of advanced materials, namely new inorganic non-metal materials, advanced macromolecular materials, high performance composite materials, special metal functional materials, high-end metal structural materials, and frontier new materials.

"The government will make full use of its rare earth resources to expand the industrial scale of new materials made with rare earth," the Ministry of Industry and Information Technology said, citing the plan which will run through the 2011-2015 period.

One of the plan's objectives is to advance to 70 per cent the application rate of production technologies for rare earth functional materials in its high-tech industries by 2015. It also targets to raise the output capacity for rare earth permanent magnet materials as well as rare earth hydrogen-containing alloy powder by 20,000 tonnes and 15,000 tonnes annually, respectively.

Output capacity of luminous materials will also be jacked up by 5,000 tons a year, targeting a total of 10,000 tonnes of rare earth phosphor yield a year by 2015.

The recognized official production channels of the functional rare earth materials will be in Beijing, Baotou city in Inner Mongolia autonomous region, Ganzhou city in Jiangxi province, Liangshan and Leshan in Sichuan province, Longyan in Fujian province and Ningbo in Zhejiang province.

Composed of 17 elements, rare earth metals are widely used in manufacturing of batteries of hybrid vehicles, computers, digital cameras, televisions, smartphones, in long-lasting light bulbs and serving as critical magnets in guided missiles.

Based on the plan, China expects a 2-trillion-yuan output from the new material industry by 2015, from a registered output value of 650 billion yuan in 2010. Xinhua News reported the industry grew by an annual rate of 20 per cent since 2005.

For 2012, China set its rare earth export quota at the same level of 2011. Total rare earth exports stood at only 14,750 tonnes from January to November 2011, representing only 49 per cent of the total quota. China supplies nearly 100 per cent of the global total requirement for rare earths, but its reserves only account for one-third of the world's total.

It slashed its production capacity to protect energy resources as well as prevent further serious environmental damage.